The plaintiff began experiencing coughing and pain in her hands and feet in December 2015. Seven months later, in July 2016, she was hired to work at the William Carter Company, and bought a long-term disability insurance policy from Reliance Standard. The policy took effect on October 12, 2016.  By January 26, 2017 — about four months after the policy kicked in — the plaintiff could no longer work, and, in insurance-speak, was “totally disabled.” Because that happened within one year of the date that she became insured, the plaintiff was subject to the policy’s Pre-Existing Conditions Limitation, which allowed the insurance company to deny benefits if her disability was “(1) caused by; (2) contributed to by; or (3) resulting from; a Pre-existing Condition,” defined as: “any Sickness or Injury for which the Insured received medical Treatment, consultation, care or services, including diagnostic procedures, or took prescribed drugs or medicines,” during the lookback period of three months immediately prior to the effective date. Both parties agree that the relevant “Sickness” is scleroderma, and that the lookback period ran from July 12, 2016, through October 12, 2016.

During that look-back period, the plaintiff went to the doctor complaining of a wide variety of symptoms. At these appointments, doctors diagnosed her with nearly a dozen ailments: fibromyalgia, borderline lupus erythematosus, and epistaxis, just to name a few. What they did not diagnose was the disease she actually had — scleroderma, a rare autoimmune condition that causes hardening and thickening of the skin and other tissues. No one had suspected this diagnosis before it happened. And no one argues that the failure of diagnosis resulted from malpractice, bad faith, or evasion.  Nevertheless, the plaintiff’s disability was determined to be a “pre-existing” condition, and her benefits were denied.

Applying the six-step review process adopted by the Eleventh Circuit, the court of appeals reversed the plan administrator and district court’s denial of benefits.

One – A lot hinges on for — a word that connotes intent. Applying that meaning to Johnson’s case, we have little difficulty concluding that Reliance Standard’s benefit-denial decision was wrong. No one “intended or even thought” to treat Johnson “for” scleroderma during the lookback period. As then-Judge Alito explained, “it is hard to see how a doctor can provide treatment ‘for’ a condition without knowing what that condition is or that it even exists.” We reach this conclusion without a thumb on the scale in Johnson’s favor. To be sure, part of the federal common law for ERISA is that the rule of contra proferentem requires us to construe any ambiguities against the drafter. But we invoke this interpretive canon only when a term is ambiguous and both sides advance reasonable interpretations that can be fairly made. Because Reliance Standard’s interpretation falls far short, we see no need to resort to contra proferentem to buttress our straightforward conclusion. In short: because scleroderma was not a condition for which Johnson received medical treatment during the lookback period, Reliance Standard was wrong to deny coverage.

Two – Johnson’s policy states that Reliance Standard “has the discretionary authority to interpret the Plan and the insurance policy and to determine eligibility for benefits.”

Three – Even though Reliance Standard’s decision was wrong, because the firm was vested with discretion in reviewing claims, we protect that discretion by evaluating whether reasonable grounds supported its decision. Reliance Standard’s interpretation of the preexisting condition language as applied to Johnson’s claim is unreasonable because it completely elides the distinction between receiving medical care for symptoms not inconsistent with a preexisting condition and receiving medical care for a preexisting condition itself. Reliance Standard agrees that its interpretation of the plan means that any symptom experienced before the ultimate diagnosis would allow the company to deny coverage so long as the symptom was not later deemed inconsistent with that condition. It is no exaggeration to say that under Reliance Standard’s view, a patient told to drink more water because her headache was likely caused by her dehydration has been treated for cancer if she turns out to have a brain tumor. And that is true even if dehydration really was the root cause of the headache. Headaches, after all, are a symptom of both brain tumors and dehydration. So, to Reliance Standard, treatment for a headache during the lookback period converts any disease or condition that causes headaches into a preexisting condition under the policy. We do not overstate the company’s view — Reliance Standard doubled down on it at oral argument. This position is unreasonable — full stop. To be sure, Reliance Standard is right that Johnson presented many symptoms to her doctors during the lookback period, some of which were not inconsistent with scleroderma. But recall that these symptoms — things like nausea, vomiting, cough, fatigue, and swelling— w ere vague and general, pointing to any variety of other ailments. And though Johnson received no fewer than ten diagnoses, scleroderma was conspicuously absent from the list.

Because no reasonable grounds were found to exist, the Court did not have to proceed to Steps 4-6, in order to consider the conflict-of-interest under which the plan administrator’s decision was made.  The Court, nevertheless, noted that the insurance company’s decision was “arbitrary and capricious.”

 

Johnson v. Reliance Standard Insurance, No.23-13443, 2025 WL 3251015 (11th Cir. Nov. 21, 2025).